Do You Do Prepayment?

Discussion in 'Lawn Mowing' started by lawnproslawncare, Feb 20, 2008.

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What do you all think about getting a select few customers to prepay for lawn care?

  1. Definately Do This!

    17 vote(s)
    37.0%
  2. Becareful Doing This!

    9 vote(s)
    19.6%
  3. I've Thought About It.

    20 vote(s)
    43.5%
  1. lawnproslawncare

    lawnproslawncare LawnSite Senior Member
    Posts: 437

    How many of you do prepayment plans for lawn care? Pay for the entire year and get X% back.
    I have been thinking about doing this.
     
  2. kleankutslawn

    kleankutslawn LawnSite Bronze Member
    Posts: 1,185

    with competition the way it is,don't think that will work.maybe prepay month to month
     
  3. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    I don't prepay for the entire season, although one year I had a Wal-Mart screw up and pay me for the entire season in March. Talk about a nice cash flow start!!

    Anyways, I send out an invoice at the beginning of the month, for that month's work.

    I too have thought about trying to get a couple of accounts set up that way, so you could have a litte more money in the back for the yearly startup, especially as we've had virtually no snow this year, so the account is getting fairly depleted, but..... I'm nervous of looking like I'm trying to pull something over on someone.
     
  4. DreamtheGreen

    DreamtheGreen LawnSite Member
    Posts: 141

    I do prepayment with several clients. It's startup $$ for materials, gas,wages and oh crap $. I have 5 that prepay for everything upfront and about 12 that prepay for just the mowing. I give a 10% discount for doing so. I refigure everything every year to see if I need to raise the contract price. This year I raised the 5 of them up $100. The ones for mowing only I raised $50 mostly cuz of gas prices and other costs going up. Last year they got the same raise. I do snow removal so I do have other funds coming in but this helps out so I'm not in a bind.
     
  5. Total Lawn

    Total Lawn LawnSite Member
    from Florida
    Posts: 12

    If a customer seems like they might be a problem payer, then yes, I do make them prepay. Otherwise, I bill after the services are completed.
     
  6. ribbie78

    ribbie78 LawnSite Member
    Posts: 150

    Ditto with dreamthegreen. I have one big account that pays for the season up front mainly because they travel all the time and it's most convenient; and I don't have to wonder when they'd get the monthly invoice. It takes care of many things right off the bat in the spring. I just don't figure it into my weekly/monthly income during the season and it works real well. Just be careful it's not a customer that tends to "ask" for extra things all the time; and if they do make sure they understand they'll have to pay for the extras.
     
  7. Classified

    Classified LawnSite Senior Member
    Posts: 988

    I have a good handfull that offerd to prepay for the year last year. i dont mind it, its nice to put some cash in the bank upfront but for me atleast, i need the regular paying customers as well. id say about 15-25% prepay for the year upfront is pretty nice but no more than that.
     
  8. Laner

    Laner LawnSite Senior Member
    Posts: 332

    Last year was my second year for prepays, it is nice to have the extra income for spring startup expenses, however I prefer billing after the services are complete. This becomes a problem when a prepay customer thinks they have paid for their services for the season and then ask for something more and don't expect a bill for it eventhough they were informed of the additional service cost upfront.
     
  9. DreamtheGreen

    DreamtheGreen LawnSite Member
    Posts: 141

    It is in the contract any "extra services" will be billed out at our per man per hour rate plus any materials and/or disposal fees.

    It's rare to get anybody that will not expect a invoice. My 5 that pay for everything, but there extra's like replacing dead plants or something else have been with me for 6 to 15 years. I've had some that travel alot actually choose the prepay when I offer it to them. People will jump aboard if they know there saving some $$.
     
  10. RGM

    RGM LawnSite Senior Member
    Male, from Baltimore Md
    Posts: 979

    I have a couple that prepay for a 10% discount I go with 25 cuts sometimes its works out better for me if its a dry year and having that money to start up is a plus
     

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